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4 www.coalage.com July 2016 news Bankruptcy Court Approves Alpha Plan, Sale Alpha Natural Resources confirmed July 7 it has received approval from the U.S. Bankruptcy Court for the Eastern District of Virginia on its plan of reorganization as it prepares to exit its Chapter 11 case during July, a plan that includes the sale of some of its core assets to newly formed Contura Energy. Company officials said the plan, for which documentation is being finalized, would be effective upon its completion of the bankruptcy case. As part of that, the court has also approved the sale of several assets to the new company, Contura, made up of Alpha's first lien lenders. The assets include the Eagle Butte and Belle Ayr operations in Wyoming, the Nicholas, McClure and Toms Creek complexes in West Virginia and Virginia, all of the compa- ny's Pennsylvania coal operations and certain reserves and the company's interest in the Dominion Terminal Associates coal ex- port terminal in Newport News, Virginia. Some other assets, in- cluding working capital, are also tied into the sale. Contura, then, will provide contingent credit support for the reorganized producer going forward; the $35 million aggregate amount will be available from Alpha's effective emergence date through September 2018. In the coming decade, the new group will also contribute up to $100 million for restricted cash accounts to aid the new Alpha in its ongoing reclamation efforts. Once it exits bankruptcy, Virginia-based Alpha — which first filed its voluntary Chapter 11 petitions in August 2015 — will likely be operated as a privately held company. Shortly after the approval announcement, the United Mine Workers of America (UMWA) said it had reached a tentative labor deal with both Contura and Alpha. The agreement, if ratified, will impact about 800 workers at the Cumberland and Emerald mines in Pennsylvania, the McClure prep plant in Virginia and the Pow- er Mountain prep plant in West Virginia. It would also cover more than 100 UMWA members at West Virginia prep plants not being transferred to Contura. Regarding the ongoing reclamation efforts, the West Virginia Department of Environmental Protection (WVDEP) reached an agreement with Alpha on a previous deal regarding its bonding and reclamation obligations. The agreement, valued at more than $325 million, will pave the way to bond and reclaim all of Alpha's legacy liability sites in West Virginia along with its continuing op- erations in the state. Kevin W. Barrett, a partner of the Bailey & Glasser law firm and special assistant attorney general for West Virginia, called the agreement "groundbreaking" as it marks the first time a large coal company has committed to remain in active business while also continuing to operate for the primary purpose of reclaiming lega- cy mining sites. "Under the agreement, the surety bonds Alpha previously posted to obtain its mining permits will remain fully in place," he said. "But Alpha, West Virginia's last remaining self-bonded coal company, will post an additional $100 million in surety and other forms of bonds to replace all of the self-bonds at its active and inactive mining sites in West Virginia." Alpha Natural Resources (entering bankruptcy) 2016 2012 Complexes 20 30 Mines 53 107 Coal Sales Coal Sales Mst(e) Mst CAPP Thermal 17 30.1 CAPP Metallurgical 11.6 19.5 Powder River Basin 35.5 46.7 NAPP Thermal 7.4 10.5 Total 71.5 106.8 Alpha Natural Resources (emerging from bankruptcy) 2015 No. of Prod. Production Complex Mines Region Market Mst Elk Run ** 3 CAPP Met 2.0 Erbacon ** 3 CAPP Met 1.8 Kepler 2 CAPP Met 0.9 Kingston 2 CAPP Met 0.8 Litwar ** 2 CAPP Met 0.4 Marfork 8 CAPP Met 2.4 Met Total 20 10.0 Bandmill 5 CAPP Thermal 2.7 Delbarton 1 CAPP Thermal N/A Goals* 2 CAPP Thermal 0.7 Inman 3 CAPP Thermal 1.3 Mammoth 5 CAPP Thermal 2.9 Roxana ** 1 CAPP Thermal N/A Sidney 1 CAPP Thermal 0.7 Thermal Total 18 10.9 Contura Energy (new company owned by first lien holders) Eagle Butte 1 PRB Thermal 19.6 Belle Ayr 1 PRB Thermal 18.3 Cumberland 1 NAPP Thermal 7.5 Emerald* 1 NAPP Thermal 1.7 Toms Creek 6 CAPP Met 1.9 McClure 4 CAPP Met 1.7 Nicholas 1 CAPP Met 0.6 Total 14 50.7 * Closed or idled in 2015. ** Idled in 2016.